Transportation Deployment Casebook/2019/Civil Aviation in China

Qualitative 

Mode description

Transportation is used for the movement of people, animals, and other things. Transport mode can be divided into three groups: land transport mode (railways, road transport and pipelines), water transport mode and air transport mode. Air transport is the fastest method of transport.

Essential technological characteristics of aircraft

The essential parts are given below:

• Engine

The engine of an aircraft provides a force for propelling the aircraft through the air. According to the propulsion, it can be classified as piston engine aircraft, turbo jet aircraft, turbo fan or turbo prop aircraft, rocket aircraft and piston engine aircraft.

• Propeller

Propeller is a type of fan. It converts rotation motion into thrust due to pressure difference. It is provided in traditional piston engine and turbo prop engine aircraft.

•  Fuselage

Fuselage forms the main body of an aircraft. It supports the power plant, fuel, passenger and cargo.

• Wings

It helps lift a heavier-than-air craft. High wings (positioned above the fuselage) will provide good lateral stability and an unrestricted view. Midwings, located in the middle of the fuselage, so there is no spars on the belly of the aircraft. It will provide a space for bombs or cargo. Low wing is located below the fuselage, it reduces the height of the chassis and simplifies engine maintenance.

• Three controls

An aircraft could move in three axes, which are x, y and z axes. The movement about these axes are called lateral or rolling, pitching and yawing movement respectively. Airplanes have three principle controls to control these movements, which are elevator, rudder and aileron.

• Flaps

Flaps are similar to aileron. They would increase the lift in aerofoils.

• Tricycle under-carriage

It is a structure in contact with the ground to absorb landing shocks and enable the airplane to maneuver.

Main advantages

Air transport has several advantages compares with other transport modes. The following are the main advantages:

• High speed

For long distance travel, air travel is the fastest method to get the destination. The typical cruising airspeed for a long-distance commercial passenger aircraft is approximately 475–500 knots (547–575 mph).

• Safety

Crashes of plane are extremely rare compares with other transport mode. According to the number of air travellers, the number of deaths caused by air crashes is negligible.

According to the latest data from the Aviation Safety Net, a total of 258 people crashed on commercial aircraft in 2016.

In addition, aviation safety is steadily improving, and the long-term trend reflects a decrease in the number of deaths relative to the total number of air passengers.

• Comfort

They offer a controlled climate at comfortable temperatures and provide passengers the opportunity to stretch their legs with tiltable seats. Aircraft also often provide passengers free drinks and food.

Other benefits:

Air transport is free from physical barriers like river, mountains and valleys. It only needs to construct airports, and no need to construct road or track. It can be used for rescue operations in natural calamities, such as earthquake, flood and other accidents.

Main markets

Due to speed and reliability of air transport, the main market of it is transport people with a long distance for different purpose, such as business and travelling. In addition, China is an exporting country, its business is relying on cargo transportation. The air freight service industry helps transporting time sensitive and valuable goods and provide mailing service.

Scene prior to the mode

The wheel was invented in 3500BC, the first sailing boat was invented in 3100BC. In the First century AD, a network of roads existed in the Roman Empire. In 1663, the first toll road opened, and in Mid 18th Century more toll roads were created. In 1783, hot air balloon was invented, it is the first machine travel through air. In 1815, steamship could cross the English Channel. In 1829, the first railway for passengers opened. 1840s, it was the great age of railway building. In 1863, the first underground railway opened in London. In 1885, the first car was invented. In 1990s, electric trams began running in many cities. In 1919, airplanes began carry passengers.

Limitations of other modes

There are general three types of transport mode, which are land (road transport, rail transport and pipeline), water (maritime transport) and air (air transport). The limitations of other modes are:

• Physical constrains in road construction
• High inventory cost for maritime transport
• Lower operation speed, waste time

Markets for transportation evolvement   

Each mode has its commercial and operational advantages.  Road transport are used for longer distances travel, it could carry heavy, large-sized goods and people on a state or national level. A large part of the global shipping companies is used water transport to transport energy or transport liquefied natural gas (LNG), chemicals and liquid commodities. Maritime transport connects all the non-inland market. Air transport are used for long distance travel for passengers and time-sensitive goods.

Factors of the new possibilities

The factors stir interest in new possibilities include speed, cost, frequency, safety, and comfort.

Invention of Mode

The forms of aviation changed a lot over time, from kite to tower jumping, supersonic and hypersonic powered flight and heavier-than-air jet. The earliest mode of man-made flight is kite flying in China. In 18th century, hot air balloon and hydrogen balloon were invented, and physicists proposed the theory of fluid dynamics and Newton’s laws. In the early of 20th century, powered flight was possible for the first time due to engine technology and aerodynamics made controlled. The experiments of gliders were the foundation of heavier-than-air airplane. In 1930s, large flying boats became popular. After World War II, land planes replaced the flying boats due to powerful jet engine. In the late of 20th century, digital electronics was used in flight instrumentation. In the 21st century, pilotless drones was larger-scale used, and digital control make the aircraft more stable and safer.

Early Market Development

China was founded in 1949, at that time only 36 airports operated and majority of them could not handle large aircraft. Before the end of 1970s, airports and airspace were controlled by the military. There was only one airline in China, which is the Civil Aviation Administration of China. China began to build their first large jetliners Y-10 in 1970. The development programme was unsuccessful and had cost 537 billion yuan and ten years. Deng Xiaoping let government to control civil sector, and the air industry started developing rapidly. In 2005, it would open China's aviation sector encourage private and foreign investment in Chinese airlines. The monopoly of China’s aviation was end.

Birthing Phase of the Mode

Before 1979, China’s airline industry was a paramilitary organization, it was regulated by government in all aspects of aviation service, for example market frequency, route, fares, and travel eligibility of the passenger. As a part of “open door” policy, airline innovation began in the late 1970s. The innovation can be divided into three stages. The first stage took place between 1979 and 1986, it is aimed to bring back business. The government made the policies to separate the civil aviation from Air Force and established several regional civil aviation and gave them power to make operational decisions. The second stage started from 1987, State Council passed “Civil Aviation Reform Measures and Implementation Report”. The main purpose is to separate regulatory agencies from the operators and break the monopoly of civil aviation bureau. It separated air operation from airline operation, encouraged the entry of new carries to encourage market. The second stage led to the proliferation of small local carries. However, most of them were too small to achieve economies of scale and losing money. The second stage occurred in 1993, it shifted the current police to the policy of airline consolidation. It created three equally sized aviation groups, which are Air Chian, China Eastern and China Southern.

The Growth of the Mode

The domestic and international market of China growth rapidly. During the period from 1978 to 1997, the average annual growth rate of its international market exceeded 20%. However, China’s international aviation infrastructure is very low. International routes are critical to the growth of Chinese airlines. To improve the international competitiveness, in 2003, the CCAAC stated that it would liberalize international aviation in a “proactive, progressive, orderly and safeguarded” way. Many agreements was signed, more international routes were scheduled and the skies became more open between China and foreign countries.

Mature Phase of the Mode

China’s aviation services industry tended to mature after 2010. Since 2013, the Chinese government relaxed the entry of private investment again. The aviation market was expanded, and many domestic and international routes opened. The new airlines bring a healthy competition to the industry. Chinese government has played an important role in shaping the aviation industry.

Quantitative

The life-cycle of air transport mode can be analysed through S-curves (status vs. time) method. A three-parameter logistic function can be estimated by using the data obtained from the world Bank. The function is $S(t)=K/[1=exp(-b(t-t0)]$, where S(t) is the status measure (Number of Passengers carried), t is the time in years, t0 is the inflection time (year in which 1/2K is achieved), K is saturation status level, and b is a coefficient. K and b are to be estimated through linear regression analysis. $y=ln(passengers/(K-passengers),x=years$. To get a good result, it is trying to let R-square close to 1.0 and make t-statistics as high as possible.

Results

Data:

Year	Number of passengers carried (thousands)	Number of Predicted Passengers (thousands)
1974	710	1007
1975	1000	1190
1976	1050	1406
1977	1110	1661
1978	1540	1962
1979	2519	2317
1980	2568	2737
1981	3236	3233
1982	3942	3817
1983	3836	4507
1984	5000	5321
1985	7300	6281
1986	10000	7412
1987	12500	8744
1988	17000	10313
1989	11080	12159
1990	16596.1	14330
1991	19520	16880
1992	27345	19872
1993	31312.5	23378
1994	37601	27482
1995	47564.5	32275
1996	51770.1	37864
1997	52277	44365
1998	53234	51906
1999	55853.1	60626
2000	61891.807	70672
2001	72660.653	82198
2002	83671.798	95358
2003	86040.642	110301
2004	119789.024	127163
2005	136721.623	146058
2006	158013.351	167062
2007	183613.132	190209
2008	191001.22	215470
2009	229062.099	242751
2010	266293.02	271880
2011	192160.158	302606
2012	318475.924	334604
2013	352795.296	367486
2014	390878.784	400816
2015	436183.969	434135
2016	487960.477	466984
2017	551234.509	498928

Table 1: the World Bank data and Predicted data (Source: the World Bank)

Graph

The S-curve shows the effects on the life cycle of civil aviation in China. The number of passengers increasing gradually year by year. The saturated number of passengers (K) is 800,000,000, the inflection year is 2014. Thus, the civil aviation industry in China is experiencing the maturing phase.